[Exclusive] GS25 Targets Beauty Market as Daiso Rises, Offering 'My Perfect Makeup' at Convenience Stores

Testing in Directly Managed Stores in the First Half of This Year
Expansion to Franchise Stores in the Second Half
"Enhancing Beauty Capabilities to Maximize Synergy"

GS25 store exterior. (Photo by GS Retail)

Convenience store GS25 is the first in the industry to introduce a beauty device that diagnoses personal color using AI (artificial intelligence). As demand for cost-effective cosmetics, which are leading the global 'K-beauty' craze, continues to grow, the strategy is to strengthen the beauty category to enhance customer attraction.

According to industry sources on the 21st, GS25, operated by GS Retail, will install personal color diagnosis devices in directly managed stores and begin testing in the first half of this year. They have decided to install the 'TwinIt Device,' developed by the AI platform company 'TwinIt.'

This device diagnoses the personal color of customers visiting the convenience store and recommends customized makeup through AI. It analyzes facial structure with 3D stereoscopic analysis and recommends suitable makeup products based on this. The device is expected to offer a service that allows customers to virtually try on cosmetics sold by GS25 on their faces. A GS Retail official stated, "If the device is successfully established, we plan to expand it to franchise stores in the second half of the year."

'TwinIt AI Beauty Device' installed at Hyundai Department Store in Gangdong-gu, Seoul. Photo by Jae-Hyun Park

Recently, the convenience store industry has been strengthening its cosmetics lineup. Amid domestic economic stagnation leading consumers to cut back on spending, demand for indie brand cosmetics has surged, and the strategy is to capture beauty demand through convenience stores, which offer easy accessibility.

In fact, despite consumer sentiment being dampened by high inflation, demand for affordable cosmetics has exploded. For example, Daiso, a fixed-price household goods store, has seen cosmetics priced between 1,000 and 5,000 won sell out rapidly, driving sales. Based on cumulative data from January to November last year, the cosmetics category sales of Asung Daiso, which operates Daiso, grew by 150% compared to the same period the previous year. The growth rate of cosmetics sales has been steeper than 50% in 2022 and 85% in 2023. Asung Daiso surpassed 3 trillion won in annual sales in 2023 and is expected to reach 4 trillion won last year.

The growth of health & beauty (H&B) specialty store CJ Olive Young is even steeper. Last year, its annual sales increased by over 1 trillion won, approaching 5 trillion won. All these stores are called playgrounds for the 'Jalpa generation' (a portmanteau of the Z generation, born in the mid-to-late 1990s to early 2010s, and the Alpha generation, born in the early 2010s to mid-2020s), where young people with limited budgets are opening their wallets wide for mid-priced cosmetics.

GS25 has recently launched small-sized, cost-effective cosmetics and has begun a full-scale attack on the beauty market. They are expanding collaborations with skincare specialist brands such as Mediheal, Dewytree, and Acnes. Sales have also increased. Last year, GS25's cosmetics category sales rose 45.6% compared to the previous year. The growth rate of basic cosmetics sales expanded from 35.5% in 2022 and 54.1% in 2023 to 74.3% last year.

Moreover, by introducing the recently popular personal color AI diagnosis device, GS25 can stimulate the curiosity of its core customer base, the Jalpa generation, maximizing customer attraction. In fact, the TwinIt Device pop-up store held by Hyundai Department Store at Cheonho branch until the 16th attracted over 2,300 visitors in seven days. Although Cheonho branch's main customers are middle-aged and older, the department store reported a noticeable increase in young customers during that period. Beauty sales linked to TwinIt reached 11 million won. A GS Retail official said, "We judged that providing services such as personal color diagnosis at convenience stores would create greater synergy in strengthening beauty capabilities," adding, "From the first half of this year, we plan to expand the beauty lineup by selling color cosmetics as well."